My fall 2011 blog discussed Chickasaw Nation and Choctaw Nation of Oklahoma v. Mary Fallin, in her official capacity as Governor of the State of Oklahoma, et al., Case No. CIV-11-927-C, filed in Federal Court in Oklahoma City (“Federal Court case”) on August 18, 2011. In the Federal Court case, the Chickasaw and Choctaw Nations seek declaratory and injunctive relief to protect their federal rights, their present and future water rights, regulatory authority over water resources and immunity from state law and jurisdiction over certain waters located in Southeastern Oklahoma. Certain aspects of this suit were also covered in Mark Walker’s December 2011 blog on the 1830 Treaty of Dancing Rabbit Creek. As a result of recent developments, claims in the Federal Court case and outside that litigation have evolved and escalated, and the stakes are now much higher.

In June, 2010, the Oklahoma Water Resources Board (“OWRB”) entered into an agreement with the Oklahoma City Water Utility Trust (“Trust”) to sell to the Trust certain of the OWRB’s rights to store waters of the Kiamichi Basin in the Sardis Reservoir and to control withdrawals of water from the reservoir. The tribes claim that a fundamental element of that agreement is the OWRB’s issuance of a water use permit granting the Trust annual water withdrawal rights from the Sardis Reservoir and/or the Kiamichi Basin in an amount roughly equal to ninety percent (90%) of Sardis’ estimated sustainable yield. The tribes take issue with the sale, transfer and appropriation of water which they assert was given to them under various treaties with the United States that granted them exclusive dominion and control over the water resources on their tribal lands in Oklahoma.

In a most important tactical move, the State of Oklahoma, through the OWRB, filed a Petition for a General Stream Adjudication in the Oklahoma Supreme Court on February 10, 2012, asking that court to assume original jurisdiction and determine the relative rights of all parties laying claim to waters which are the subject of the Federal Court case, pursuant to the federal McCarran Amendment, 43 U.S.C. § 666. Under the McCarran Amendment, such proceedings may be brought in either federal or state court, with the United States waiving its sovereign immunity if all interested parties are joined so that all rights can be determined in one proceeding. In a move surprising to many, the Oklahoma Supreme Court on February 23, 2012 unanimously agreed to accept original jurisdiction of the case and set a briefing schedule.

Not to be outdone, the Chickasaw and Choctaw Nations filed a Motion for Partial Summary Judgment in the Federal Court case on February 14, 2012, essentially asking the federal court to enjoin the Oklahoma Supreme Court from making a determination of the relative rights of the parties to the water. In this motion the tribes “clarified” that their case is not one that seeks adjudication of water rights, nor do they seek to determine the full extent of their regulatory authority over the water. The Nations contend that federal law does not allow the defendants to “drain the Treaty Territory waters in whatever quantity and for whatever purposes….without regard to the Nations’ rights…” Motion for Partial Summary Judgment Brief, p. 15. As a result of this filing, the Nations’ position is much less clear than before when they were seeking exclusive dominion and control over the same water.

The Defendants have filed motions to stay briefing on the Tribes’ Motion for Partial Summary Judgment. Their arguments include assertions that the federal court lacks jurisdiction over the subject matter of the action; the case is barred because it violates the state’s Eleventh amendment immunity in the relief sought against the OWRB defendants; and there is a failure to join indispensable parties (the U.S. and the OWRB). Interestingly, the Defendants also ask the federal court to abstain from addressing the merits of the Federal Court case in deference to the General Stream Adjudication suit where the Oklahoma Supreme Court has assumed original jurisdiction pursuant to Colorado River Water Conservation Dist. v. United States, 424 U.S. 800 (1976).

And it gets worse. On February 20, 2012 the Association for the Protection of Oklahoma Water (“APOW”) filed suit claiming irregularities in the OWRB’s authorization process for requesting a General Stream Adjudication. The suit alleges that the OWRB went into executive session to discuss the Federal Court case filed by the Chickasaw and Choctaw Nations and came out of the meeting with a motion authorizing the stream adjudication, in violation of the Oklahoma Open Meeting and Open Records Acts. If the General Stream Adjudication request was filed as the result of improper authorization, presumably that proceeding could be dismissed. However, assuming the Oklahoma Supreme Court agreed with APOW’s contention, it might decide to stay the proceedings until the OWRB authorized another General Stream Adjudication request in accordance with state law. The original General Stream Adjudication case could then proceed or, if necessary, a new original action could be filed.

This is high stakes litigation between powerful sovereigns pitting the decision making role of the federal courts against that of a state supreme court. The jurisdictional dispute involving the state’s desire to avoid piecemeal litigation and seek a comprehensive determination of the rights of all parties in one action in state court as envisioned by the McCarran Amendment, versus the Nations’ interest in having their treaty rights determined in federal court, will be fascinating to watch. The substantive supremacy issues go to the heart of how dispute resolution occurs within a federal system, and the ultimate winner of this struggle will realize significant revenue for many years to come.

There is always the possibility that a negotiated settlement could let the courts off the hook. With the stakes being so high, both sides are already flinching, as evidenced by the lack of clarity in the filings made by both sides in the Federal Court case. However, sooner or later each party will have to tell the court exactly what it is asking the court to do, unless the parties settle. Those looking to see whether a settlement is possible may well be interested in the outcome of an upcoming hearing in the General Stream Adjudication case. According to an Oklahoma City newspaper, such a hearing is planned in April before a Supreme Court referee.

Again, the words “stay tuned” are particularly appropriate.

PostScript:After this blog was written but before posting, the U.S. Justice Department on March 12, 2012 removed the General Stream Adjudication case from the Oklahoma Supreme Court to the US District Court in Oklahoma City, but it landed in a different federal court than the one where the Chickasaw case is pending. The Judge asked for briefs by March 27 on whether the cases should be consolidated, and the City of Oklahoma City filed a Motion to Remand the streamwide adjudication on March 19, 2012. Hold on, these cases are moving at the speed of light.

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